Workplace Training Programs: Instruments for Human Capital Improvements or Screening Devices?

Brunetti, Irene and Corsini, Lorenzo (2014): Workplace Training Programs: Instruments for Human Capital Improvements or Screening Devices?

Abstract

In this paper we analyse the effect of an Italian training program on the re-employment probability of young unemployed workers. The program consists solely of workplace training and is coordinated by employment centre, but it is fully implemented by firms. We develop a discrete duration analysis and our results suggest that workplace training improves only the immediate re-employability of trained workers, failing to bestow them with durable human capital improvements. These results appear to be robust to spurious duration dependence and to self-selection. Our analysis focuses on the role of unobserved heterogeneity and, accounting for it, we show that the training implementation is useful to sort “good” trainees from “bad” ones: therefore we suggest that firms are exploiting training as a screening device.

• Item Type: MPRA Paper
• Language: English
• Keywords: duration model; policy evaluation; propensity score matching; screening device; workplace training; youth unemployment.
• Subjects: C - Mathematical and Quantitative Methods > C4 - Econometric and Statistical Methods: Special Topics > C41 - Duration Analysis ; Optimal Timing Strategies; I - Health, Education, and Welfare > I3 - Welfare, Well-Being, and Poverty > I38 - Government Policy ; Provision and Effects of Welfare Programs; J - Labor and Demographic Economics > J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers > J64 - Unemployment: Models, Duration, Incidence, and Job Search; J - Labor and Demographic Economics > J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers > J68 - Public Policy; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M5 - Personnel Economics > M53 - Training

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